Top Takeaways:
- A misreading of demand by saw mills at the onset of COVID-19 was the impetus for skyrocketing lumber prices.
- Cabinets are easily the #1 product category for product substitutions across industry segments.
- Even with new sourcing, lead times for cabinets can still be upwards of four months.
By Robert Isler
Supply chain disruptions, sourcing challenges, and over-the-top price hikes have been affecting virtually every product line used within the kitchen and bath industry, but none more than cabinets.
To understand how we got there, let’s start with a brief history of lumber. When the pandemic began, both hardwood and softwood mills either reduced production or closed outright in anticipation of slower business or because of stay-at-home orders. While supplies were falling, demand began to steadily increase. A confluence of factors were the cause, including a pandemic-related increase in DIY, a housing market that exceeded expectations, and a greater desire to remodel based on the sharp increase in time spent at home. Cabinet sales were brisk, up 15 percent in 2021 vs. 2020 according to the Kitchen Cabinet Manufacturers Association.The supply/demand imbalance caused hardwood prices to rise significantly, affecting popular cabinet woods such as oak, maple, hickory and cherry. Luckily, the only cabinet softwood that ranks in this group is pine, since softwood prices went through the roof, reaching an all-time high of $1515 per thousand square feet in late May of 2021, nearly 400 percent above pre-pandemic levels. It has since come down significantly, as suppliers have ramped production. This is the cost inflation backstory in a nutshell, but as prices begin to settle, major challenges remain in acquiring products.
“By late May of 2021 the price of lumber reached an all-time high at $1515, nearly 400 percent above pre-pandemic levels. It’s been a roller coaster ride ever since.”
As a result, designers are scrambling to source products anywhere they can be found. Gone are the days of brand loyalty, at least for now, according to the Q1 NKBA/John Burns Kitchen & Bath Market Index (KBMI) report. When designers were asked which product categories they are using brands they haven’t tried in the past, 22% said cabinetry, more than double the next closest categories of refrigerators and faucets, at 10 percent apiece. Product scarcity and shortages of specific wood types have been causing havoc.
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Nearly two in three designers said they are leveraging new brands based on better lead times and availability. While nearly half plan to eventually return to their historical brands, many aren’t sure. Cabinets are the top category being substituted for each of kitchen and bath’s four industry segments: manufacturing, building and construction, retail sales and design. As one designer put it “It’s taking upwards of 20 weeks to get cabinets in. This is the third different cabinet line I’ve tried.” Another noted “Cabinet lead times remain at three to four months, minimum, and we’ve had multiple price increases with four different lines we carry.” In this quest for substitute brands, cabinets, along with refrigerators, have been identified as the most difficult product lines to find, each noted by over 60 percent of respondents. One respondent offered the solution of increasing storage space so that cabinets and appliances can be ordered months in advance.
Eventually supply and demand for cabinets will be more aligned as lumber prices settle down and the housing market cools. Until then, flexibility and creativity will be on full display as industry professionals do whatever it takes to fill the needs of their customers.